Rachel Reeves looks set for a tax bonanza at the Autumn Budget and motoring is likely to be firmly in the sights of the Chancellor. Ahead of the November 26 statement, Ms Reeves has boldly warned that she will need to make “necessary” choices to help the economy “for years to come”. If that doesn’t sound like tax rises are a certainty, I don’t know what will.

Pay-per-mile changes, fuel duty hikes and electric car charging updates have all been mooted ahead of her statement. But, there is one simple change Ms Reeves is almost certain to confirm in November that would affect almost every petrol, diesel and electric car owner in the UK – Vehicle Excise Duty (VED) fees. VED rates were overhauled earlier this year, with electric car owners hit with fees for the first time ever, while first-year rates were dramatically increased.

New hikes scheduled for April 2026 are effectively a certainty, with the RAC even confirming that road tax rates are automatically adjusted by the Government in line with inflation. The standard VED rate, applied to petrol, diesel and electric cars built after 2017, increased from £190 to £195 last year.

It’s therefore safe for us to predict that a similar £5 or even £10 rise could be on the cards, taking bills to £200 to £205 per year. VED charges are based on Retail Price Index (RPI) inflation, with first-year VED rates also likely to be impacted.

Year one prices currently range anywhere between £110 and £5,490, depending on vehicle emissions. It’s easy to predict that the lower rate could rise by around £5, with the top end increasing by a couple of hundred pounds at least.

The Expensive Car Supplement has also been subject to increases in the past couple of years and is likely to face higher rates from 2026. It’s therefore likely that the current £445 per year bill could rise by £15 or £20 in another blow to motorists.

Older vehicles registered between 2001 and 2017 pay VED rates on a sliding scale, with the most polluting vehicles paying £760 per year to use the roads.

Expect another slight rise in 2026, with these top-end bills likely to increase by around £15 or £20. What will the higher costs mean for road users? Most will simply accept the increase as part and parcel of owning a vehicle. VED rises are nothing new and are an annual occurrence most have got used to.

However, if Ms. Reeves really throws a spanner in the works and hikes everything from fuel duty fees to launching a costly pay-per-mile rate, some will start to consider whether it’s all worth it. A previous poll from Stagecoach showed that as many as 45% of road users were considering ditching their car due to rising costs. 

Could the Budget signal the moment that thousands of Britons decide that enough is enough and put their car on the market once and for all?